The Flemings will need $80,000 annually for 20 years during their retirement. How much will they have at retirement if they can earn a 4% rate of interest on their investment?
The Flemings will need $80,000 annually for 20 years during their retirement. How much will they have at retirement if they can earn a 4% rate of interest on their investment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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The Flemings
Transcribed Image Text:The Flemings will need $80,000 annually for 20 years during their retirement. How much will they have
at retirement if they can earn a 4% rate of interest on their investment?
Expert Solution
Step 1
The present value of the annuity is the current value of a series of annuity payments.
It shows the worth of the total future amount at present times.
It simply depicts the cash value of future annuity payments.
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